Peanut butter meets jelly: Smucker to take over Jif, Crisco from Procter & Gamble

CINCINNATI (AP) _ It's a $1 billion deal made in sandwich heaven: Peanut butter and jelly are getting hitched. <br><br>The J.M. Smucker Co., which makes a wide variety of jams and jellies, is acquiring

Wednesday, October 10th 2001, 12:00 am

By: News On 6

CINCINNATI (AP) _ It's a $1 billion deal made in sandwich heaven: Peanut butter and jelly are getting hitched.

The J.M. Smucker Co., which makes a wide variety of jams and jellies, is acquiring the Jif peanut butter brand from Procter & Gamble Co.

The purchase price for the deal, which also includes the Crisco cooking oil brand and Jif and Crisco manufacturing plants in Lexington, Ky., and Cincinnati, is $1 billion in stock. Smucker management said it plans to retain all employees at the plants.

Investors found it a tasty combination, pushing both stocks higher.

Smucker, based in Orrville, said the deal will eventually almost triple its annual earnings and double annual sales to $1.3 billion.

P&G, which has been getting rid of underperforming brands for seven years, had announced in April that it intended to swap or sell the Jif and Crisco brands.

A.G. Lafley, P&G's chief executive, has said cooking oils and peanut butter have become generic commodities in the eyes of consumers, so the two brands did not show the prospects for sales increases that P&G wanted.

P&G stockholders will receive one share of J.M. Smucker stock for every 50 shares they hold in Procter & Gamble. Based on Smucker's closing stock price Tuesday of $25.89 per share, that would value the deal at $1 billion.

In midday trading Wednesday on the New York Stock Exchange, Smucker shares climbed 16.8 percent, or $4.36 a share, to $30.25 while P&G shares were up $1.43 a share to $73.97.

J.M. Smucker was founded in 1897, when the company's namesake and founder sold his first product _ apple butter _ from the back of a horse-drawn wagon. The company's products include fruit spreads, ice cream toppings and natural peanut butter. The family-run business has about 2,000 employees worldwide and distributes products in more than 70 countries.

Procter & Gamble markets more than 250 brands including Pampers diapers, Tide detergent, Pantene shampoo, Bounty paper towels and Crest toothpaste. P&G employs nearly 106,000 people in more than 80 countries.